Question: A company is considering two projects. Project I Project II Initial investment $2,00,000 $2,00,000 Cash inflow Year 1 50,000 60,000 Cash inflow Year 2 50,000
A company is considering two projects.
| Project I | Project II | ||
| Initial investment | $2,00,000 | $2,00,000 | |
| Cash inflow Year 1 | 50,000 | 60,000 | |
| Cash inflow Year 2 | 50,000 | 60,000 | |
| Cash inflow Year 3 | 50,000 | 80,000 | |
| Cash inflow Year 4 | 50,000 | 10,000 | |
| Cash inflow Year 5 | 50,000 | 50000 | |
What is the payback period for Project II?
| a. | 3 years | |
| b. | 4.3 years | |
| c. | 2.5 years | |
| d. | 1 year | |
| e. | 5 years |
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